LONDON (Alliance News) - Palace Capital PLC Monday said it has agreed to buy the former regional headquarters of the Bank of England in Leeds, northern England, for GBP10 million.
In a statement, the property investment company said the seller of Bank House is a "major pension fund".
The gross rental income of Bank House amounts to GBP910,310 per annum, Palace Capital said, with net income of about GBP864,000, representing a net yield of 8.1% after transaction costs. Palace Capital thinks the net yield can be increased to about 10% over time.
"There is currently 8,800 square feet of vacant space. The company will be taking active steps to effect early lettings to take advantage of a resurgent Leeds office market," Palace Capital said.
Bank House was originally built in 1968 for the Bank of England, which still occupies the lower two floors. The other occupants are Axa Insurance and Leeds solicitors Walker Morris. The majority of the leases do not expire until 2019/20, Palace Capital said.
"This is another example of how we are growing the company through regional and secondary commercial property acquisitions. We are continuing to seek and evaluate additional acquisitions of property portfolios and appropriate single assets and are positive about the prospects of further enhancing shareholder value," Neil Sinclair, Palace Capital's chief executive, said in a statement.
Palace Capital shares were up 0.3% at 367.00 pence on Monday morning.
By Samuel Agini; firstname.lastname@example.org; @samuelagini
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